Unit 2.

FACTORS OF PRODUCTION

TEXT A:Factors of production

TEXT B: Entrepreneurship
TEXT C: Factors of production for an innovation economy
BUSINESS COMMUNICATION: In the office
GRAMMAR: Present Tenses. The Present Perfect and the Present Perfect Continuous Tenses

“The supply-side claim is not a claim. It is empirically true and historically convincing that with lower
rates of taxation on labor and capital, the factors of production, you'll get a bigger economy.”
Jack Kemp (1935 –2009),an American politician, a collegiate and professional football player

LEAD-IN
1. Would you like to own your own business? Why or why not?
2. Would you prefer to buy an existing business or start one yourself?
3. What product or service would you provide?
4. Where would you want to locate the business and for what reason?
5. How would you recruit employees?

PRE-TEXT EXERCISES

A. Reading drills
Ex.1. Practice reading the following words.
y/i [aɪ] rye, fly, sky, dry, try, ply, dye, by-product, type, byte, cycle, lifestyle, item, size, dive, sizable
[aɪ]falsify, intensify, notify, signify, specify
[ɪ] myth, symbol, system, syndicate, Sydney
[ɪ]security, property, economically, secondary, duty, baby, lady, study, noisy, lobby, pony, sorry,
lorry,symphonic
[aiə] tyre, tire, hire, fire
y [j]yes, yet, you, yell, yelp, yield, youthful, yard, yawn
u [ju:] use, mule, tune, due, suit
u[ʌ] but, must, run, sun, up
u[u:] rule, true, fruit, blue, flu
[ɔ] – [ʌ] not – nut, boss – bus, dock – duck, lock – luck, sock - suck

Rhyme, single, rhythm, rivalry, yawn, risky, syllable, sight, historically, multiply, mind, pretty, think,
nymph, yesterday, child, pyjamas, memory, kind, wish, analytic, behind, picture, category, yucca, desire,
light, exactly, king, candy, miner, syndicate, typist, hymn, rice, myself, risk, pyramid, nylon, mineral,
line, hydrant.

Ex.2. Read the words in the groups below. Pay attention to the word stress.
a) words with the stress on the first syllable:
access, acre, actual, balance, benefit, broker, capital, dwelling, enterprise, forecast, glut, hectare, tangible,
labour, land, lease, lot, luxury, maintenance, management, owner, ownership, parking, property, suburbs,
quality, quantity, raw, scarce, scarcity, service, term, urban, utilize;
b) words with the stress on the second syllable:
accumulate, accomplishment, consumer, commodity, delivery, environment, estate, inherit, inheritance,
intangible, location, necessity, securities, utility;

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c) polysyllabic words with the main and secondary stress:
acquisition, competition, exploitation, externalities, information, entrepreneur, entrepreneurial,
entrepreneurship, privatization, profitability, relocate, substitution, telecommunication, termination,
urbanization, undercapitalization, utilization.

Ex.3. Read the following two-syllable words in the box. Pay special attention to the word stress - it
is different for noun and verb.
Verb Noun
conduct conduct
discount discount
object object
permit permit
produce produce
reject reject
subject subject
transport transport

Now, read and translate the sentences with some of the words from Ex.3.
1. Ethical conduct is a particular concern among more vulnerable service users.
2. We are conducting a survey of consumer attitudes towards organic food.
3. Employees can buy books at a discount.
4. Games were discounted to as little as $5.
5. My object was to explain the decision simply.
6. Robson strongly objected to the terms of the contract.
7. Dogs are not permitted inside the shop.
8. Hikers need a camping permit for overnight stays in the park.
9. The factory produces an incredible 100 cars per hour.
10. We sell tinned goods and fresh produce in our shop.
11. These two plates are factory rejects because they’re slightly cracked in the middle.
12. The agency sent five possible candidates for the job and we rejected two.
13. Genetic engineering is very much a subject for debate.
14. He didn’t want to subject his child to the long journey.
15. The pipeline was constructed to transport oil across Alaska to parts on the coast.

B. Word-formation
Ex.4. Using the endings -er, -or, -ian, -ee, -ant and -ist, change each of the following words into a
noun referring to people.
Model: law +-er → lawyer; audit + -or → auditor.
Technical, employ, consult, scientific, drive, program, propriety, music, train, act, art, bake, bike, carry,
correspond, dental, football, govern, humour, instruct, jog.

Ex.5. Complete each sentence with a noun that refers to the type of person described.
1. He works at the reception desk so he is a __________ .
2. To do this work an employer had to hire a new __________ .
3. She wants to work for the legal department so she is a __________ .
4. As an __________ he audits the company’s accounts.
5. She plays the violin perfectly so she is a __________ .
6. He studied electricity and became an __________ .
7. She works for a very popular newspaper so she is a __________ .

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8. He reports on sport events for the ICTV so he is a __________ .
9. Over 100 people applied for the job; we didn’t expect so many __________ .
10. I’ve got bad toothache; I need to go to the __________ .

Ex.6. Make up nouns from the verbs and adjectives given.

Verb → Noun: accept, promote, enter, initiate, occur, protect, store, waste, refer, recruit.
Adjective → Noun: effective, free, reliable, social, real, aware, liable, important, competitive, industrial.

TEXT A: FACTORS OF PRODUCTION

Active Vocabulary
Key terms: factors of production, (permanent/recyclable) land, labour, (human) capital, workforce,
information, goods and services, natural resources, satisfaction, value, human capital, labour supply,
human resource, human efforts, revenue, wage, salary, demand for, activities, facilities, utility, enterprise,
productive output, contribution.
Other words and expressions: available to, reusable, fixed, irreproducible, expansible, compressible,
substitutional, transportable, to consume smth, diffusive, shareable, to derive from, contribution of smth,
to depend on, decision-makers, to be extended into, endangered species, to protect from, to depreciate
from time and use, to be in perpetuity, to be applied to smth.
Linking words and phrases: that is, in fact, such as, as well as, in contrast, whenever, however, either …
or, thus, ultimately, in turn, not only … but also.

Choices concerning what goods and services to produce are choices about an economy’s use of its
factors of production, the resources available to it for the production of goods and services. The value, or
satisfaction, that people derive from the goods and services they consume and the activities they pursue
are called utility. Ultimately, then, economy’s factors of production create utility; they serve the interests
of people.
The factors of production in an economy are its labour, capital, enterprise and natural
resources. Labour is the human effort that can be applied to the production of goods and services.
People who are employed or would like to be are considered part of the labour available to the economy.
Capital is a factor of production that has been produced for use in the production of other goods and
services. Office buildings, machinery, and tools are examples of capital. Enterprise means the activities
of profit-seeking decision makers who determine which economic activities to undertake and how they
should be implemented. Natural resources are the resources of nature that can be used for the
production of goods and services.
The fifth factor -information– is sometimes included as a factor of production in modern
economics.
Natural resources – land and mineral deposits
The factor of production land comprises not only the actual land on which the firm has its factory
or offices but also all the natural resources, such as the minerals, raw materials, vegetation and wildlife
that can be extracted from it.
Land is not produced, it was created. It is the world, the planet from which man evolved, with the
sun that energizes it and the orbit that tempers it. Mankind did not create the Earth with its space and
resources, nor can we add to them. We can only acquire them, often by fighting, or rent-seeking, or in
other counterproductive ways. Man at best improves and develops capacities inherent in the free gift.
"Land" in economics means all natural resources and agents, with their sites (locations and
extensions in space).
Economic land excludes many things, too. It excludes land-fill, for example, by which many
cities are extended into shallow waters. The site and seabed are properly land; the land-fill is an

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improvement. There is no "made land" in the economic sense: it is reallocated from other uses.
Expanding cities take farmland from producing food and fibre, much of it for the expanding city itself.
Filled land in shallow water near cities is taken away from anglers and sailors and viewers and ecologists,
who now organize to save it from being "made" away with. Drained and filled wetlands are taken away
from endangered species, as well as from their primal role as filters protecting coastal waters from river
trash and pollutants.
Land as site is permanent and recyclable. Land as "site" (location plus extension) does not
normally wear out, depreciate, spoil, obsolesce, nor gets used up by human activities incident to
occupancy and production. In contrast, capital depreciates from time and use. After being formed, it must
be conserved from entropy by continual maintenance, repair, remodelling, safeguarding against theft and
fire, and so on. Land normally does not depreciate as a function of time. Most attributes of land also
withstand use and abuse. Population, capital, and demands all grow while land remains fixed.
Land is reusable. All the land we have is second-hand, most of it previously-owned. Our
descendants, in turn, will have nothing but our hand-me-downs. As there is never any new supply, the old
is recycled periodically, and will be in perpetuity, without changing form or location.
Land supply is fixed. Being both irreproducible and permanent, land remains fixed. Both the
overall quantity and the special qualities of specific lands remain fixed.
Human resources – labour
In order to produce the things we desire, a human resource must be used. That human resource
consists of the productive contributions of labour made by individuals who work. The contribution of
labour to the production process can be increased. Whenever potential workers obtain schooling and
training and whenever actual workers obtain new skills, labour’s contribution to productive output will
increase.
The terms “labour” and “human resources” have essentially the same meaning in this context and
are often used synonymously. These terms refer to the productive abilities of people. Labour, or human
resources, is also limited. There are only so many people at any given time. However the skills,
knowledge and talents of people can be improved or made more productive through education and
training.
Labour is human effort that can be applied to production. People who work to repair tires, pilot
airplanes, teach children, or enforce laws are all part of the economy’s labour. People who would like to
work but have not found employment (unemployed)are also considered part of the labour available to the
economy.
In some contexts, it is useful to distinguish two forms of labour. The first is the human equivalent
of a natural resource. It is the natural ability an untrained, uneducated person brings to a particular
production process. But most workers bring far more. The skills a worker has as a result of education,
training, or experience that can be used in production are called human capital. Students who are
attending a college or university are acquiring human capital. Workers who are gaining skills through
experience or through training are acquiring human capital. Children who are learning to read are
acquiring human capital.
The amount of labour available to an economy can be increased in two ways. One is to increase
the total quantity of labour, either by increasing the number of people available to work or by increasing
the average number of hours of work per week. The other is to increase the amount of human capital
possessed by workers.
Labour is a meaningful activity with the aim to create goods and services. Labour does not exist
itself; the bearer of labour is the man. Revenue for labour is wage.
Demand for labour depends on wages, other resources of production, amount of capital, used
technology. Demand for labour also depends on marginal product of labour and marginal revenue product
of labour. Marginal revenue product of labour is wage. If the labour force increases, wages decrease.
Labour supply depends on: wage in comparison to social benefits; population; a part of
population which forms labour force (both the employees and unemployed); average number of working

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hours a year (number of working days/daily working hours); quality and quantity of work.
Labour is the workforce of an economy and it is important to analyse labour in two ways:
1. The quantity of labour – obviously the numbers of workers (16-60/65 –population of working
age) is finite. A low activity rate could indicate a high level of unemployment and/or high number of
students / housewives / early retired.
Many developed countries, including the UK, are suffering from falling birth rates and therefore
there are fewer people joining the workforce. There are options open to the government for solving this
problem such as a raising the retirement age or raising immigration.
2. The quality of labour – note that some workers are more productive than others. If workers
receive more or better training they will be capable of producing more goods and services and this will
raise an economy’s labour productivity (output per worker). The value of a worker is called human
capital.
Also, it is worth noting that labour can be geographically and occupationally immobile.
Geographically people can be unwilling to move area (e.g. family /friends' ties, schools for children,
house prices and cost of living) and people are often unwilling to change jobs due to the retraining
involved.
From a certain point wages are so high that some people value more free time than higher wage.
Unemployment is measured by unemployment rate and is given in %.
Forms of wages:
Hourly rate is a reward for certain time of hour.
Piece rate is derived from the performance standards - how many pieces on average are made per
hour.
Nominal wage is the amount of money we get as a wage.
Real wage is the amount of goods and services which we can buy for the nominal wage. It
depends on: the level of nominal wage; the level of prices of goods and services; taxation.
Information as a factor of production
As a factor of production, information is unlike any of the other factors in many important
aspects. These differences cause the need for decision-makers to re-evaluate the way in which productive
factors are combined to produce goods and services. Information is expansible, compressible,
substitutional, transportable, diffusive, and shareable.
Information is Expansible. Most information tends to expand with use. Thus, as information is
used — even more is generated. The only limits on the use of information would be the capacity of users
to analyze, store and retrieve it. The non-scarce nature of information must bring about a rethinking of the
calculus of utility maximization or cost minimization.
Information is Compressible. It is possible to concentrate, integrate, or summarize vast amounts
of information for easier handling. Through the selection and compression of information into knowledge
and wisdom, some of it is necessarily lost.
Information is Substitutional. The evolution of mental processes which leads managers to think
of information as a factor of production must also cause them to grasp the idea that information can be
substituted for land, labour, capital, entrepreneurial ability and management. When other resources are
used more efficiently (i.e. less of the resource is used due to the use of new information), the net result is
a substitution of information for the more efficiently used resource in the productive process.
Information is Transportable. Using telecommunications technology, information can be
transported at the speed of light! Thus, it provides a lightning response time for decisions. While some
cost is involved in the "transportation" of information, its speed and lack of physical bulk should keep this
cost relatively low.
Information is Diffusive. Information tends to leak. Because information lends itself to
diffusion; secrecy, property rights, and confidentiality, are called into question. Yet, because information
is easily "transported," potentially authorized users can have ready access to it. At the same time,
processes can be established to deny, or limit, its pilferage. That is, ways should be found to secure it in

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much the same manner as the other factors of production without overly restricting the legitimate
"transportation" of information.
Information is Shareable. That is, I may give information to you without losing it myself. If
information is shared — we both have it! My stock is not diminished because yours is increased. In fact,
the same information can be sold or exchanged again.

Language notes:
endangered species – зникаючі види
output – обсяг виробництва, готова продукція, виробництво
marginal product of labour – граничний продукт праці
piece rate – відрядна розцінка, розцінка від виробітку
the salient characteristics - основні характеристики
ready access – вільний доступ
pilferage – розкрадання
overly restrict – надмірно обмежувати

VOCABULARY FOCUS

Ex.1. Find the English equivalents in the text.

Товари та послуги; служити інтересам людей;робоча сила, наявна в народному господарстві
країни;осушені і засипані водно-болотні угіддя; загальна кількість та особливі якості;не змінюючи
форму чи місце розташування; капітал зношується з часом; внесок працівників у процес
виробництва; потенційні працівники отримують освіту та практику; носієм робочої сили є
людина; збільшення середньої кількості робочого часу за тиждень; граничний продукт у грошовій
формі; середня кількість робочих годин на рік; спад рівня народжуваності;вирішення проблеми;
виробіток на одного працівника; погодинна оплата; здатність користувачів аналізувати;
мінімізація витрат; підприємницькі здібності; більш ефективно використаний ресурс; вартість
передачі інформації; право власності; запас інформації не зменшується.

Ex.2. Give Ukrainian equivalents of the following words and phrases.

Factors of production; an economy’s factors of production create utility; the human effort that can be
applied to; raw materials, vegetation and wildlife; the expanding city; capital depreciates from time and
use; productive contributions of labour; actual workers obtain new skills; the aim to create goods and
services; to increase the number of people available to work; revenue for labour; marginal product of
labour; the employees and unemployed; а low activity rate; to join the workforce; to raise the retirement
age; an economy’s labour productivity; unemployment rate; the level of nominal wage; to expand with
use; the calculus of utility maximization; vast amounts of information; selection and compression of
information; other resources are used more efficiently; at the speed of light.

Ex.3. Give three forms of the following verbs. Find the sentences with these verbs in the text.
Can, be, have, undertake, do, mean, make, take, wear, get, grow, find, bring, learn, read, fall, rise, raise,
lose, lead, think, cost, keep, leak, lend, give, sell.

Ex.4. Match the words on the left with the definitions on the right.
1 factor of a the worth of something in terms of money or other goods for which it can be
production exchanged
2 land b pay, usually of nonmanual workers, often expressed in annual terms
3 labour c the total satisfaction derived from the consumption of goods and services
4 capital d an input such as land or any natural resources, labour, capital, and

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 entrepreneurship, combined in the production process to produce goods and
services in an economy
5 information e payment for the work done
6 goods f equipment for doing something
7 services g a business firm
8 resources h accumulated wealth, especially as used in further production
9 salary i the human effort required to produce goods and services
10 value j tangible commodities or merchandise
11 wage k quantity of goods and services produced or provided by a business
organization or economy
12 facilities l stock that can be drawn on
13 utility m the factor of production which comprises not just land itself but all natural
resources. (Shoals of fish, natural forests, the atmosphere, and rivers).
14 enterprise n what is told, knowledge
15 output o tangible commodity or merchandise

Ex.5. Make up verb+noun collocations (there may be several variants).

to produce activities
to derive from the interests
to pursue food
to serve resources
to undertake goods and services
to acquire new skills
to obtain laws
to improve quantity of labour
to enforce knowledge
to increase human capital

Ex.6. Choose an appropriate word or phrase to complete the following sentences.

Capital stock, factor of production, human capital, human effort, labour, land, physical and mental,
production process, resources, wages.

1. 'Factors of production' may also refer specifically to the primary factors, which are stocks including
land, __________ (the ability to work), and capital goods applied to production.
2. The primary factors facilitate production but neither become part of the product (as with raw
materials) nor become significantly transformed by the __________ (as with fuel used to power
machinery).
3. 'Land' includes not only the site of production but natural __________ above or below the soil.
4. Recent usage has distinguished __________ (the stock of knowledge in the labour force) from labour.
5. Entrepreneurship is also sometimes considered a __________ .
6. Labour is __________ used in production which also includes technical and marketing expertise.
7. The payment for someone else's labour and all income received from one’s own labour is__________ .
8. Labour can also be classified as the __________ contribution of an employee to the production of the
good(s).
9. Money, however, was not considered to be a factor of production in the sense of __________ since it
is not used to directly produce any good.
10. Land is often referred to as "capital", in the sense that one can buy __________ and use it as a
"capital investment".

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Ex.7.Fill in the gaps with appropriate prepositions or adverbs.
1. The factors _____ production _____ an economy are its labour, capital, enterprise and natural
resources.
2. Capital is a factor _____ production that has been produced _____ use _____ the production _____
other goods and services.
3. Human resource consists _____ the productive contributions _____ labour made _____ individuals
who work.
4. Land _____ economics means all natural resources and agents_____their sites.
5. Many developed countries are suffering _____ falling birth rates and therefore there are fewer people
joining the workforce.
6. _____ a certain point wages are so high that some people value _____ free time than higher wage.
7. Real wage is amount _____ goods and services which we can buy _____ the nominal wage.
8. The non-scarce nature _____ information must bring _____ a rethinking _____ the calculus _____
utility maximization or cost minimization.
9. _____ the selection and compression _____ information _____ knowledge and wisdom, some _____
it is necessarily lost.
10. Choices concerning what goods and services to produce are choices _____ an economy’s use _____
its factors _____ production, the resources available _____ it _____ the production _____ goods and
services.

Ex.8. Combine two parts logically to make complete sentences.

1 In economics, factors of production (or a water, air, soil, minerals, flora and fauna that
productive inputs or resources) are are used in the creation of products.
2 Land or natural resource – naturally occurring b in the production of other goods.
goods such as
3 Labour is human effort used in production which c any commodities or services used to produce
also goods and services.
4 The capital stock – human-made goods (or d future structures, buy machines and pay
means of production) which are used wages.
5 Acquired skills (as opposed to "know-how," an e buildings, machinery, tools and other
attribute of society rather than individuals) have productive resources used in the process of
come to be creating goods and services.
6 Capital is money needed to build f includes technical and marketing expertise.
7 Physical capital are things that have already been g production together to make a good or
produced and service.
8 Financial capital refers to money that business h information, but also “knowledge,
people use to buy collaboration, process-engagement, and time
quality”.
9 An entrepreneur is someone who puts all the i viewed as analogous to physical equipment,
factors of capable of yielding their owners a return.
10 The general opinion seems to be that the “new j then are used in production of other goods
factor of production” is “intellectual capital”, an and services.
umbrella term that includes

Ex.9. Look through the text again and replace the words/phrases in italics with similar ones.
1. Finally, economy’s factors of production create utility; they serve the interests of people.
2. Drained and filled wetlands are taken away from endangered species, and in addition, from their
primal role as filters protecting coastal waters from river trash and pollutants.

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3. Whenever potential workers obtain schooling and training and whenever actual workers obtain new
skills, labour’s contribution to productive output will rise.
4. Although the skills, knowledge and talents of people can be improved or made more productive
through education and training.
5. If the labour force increases, wages fall.
6. A low activity rate could show a high level of unemployment and/or high number of students /
housewives / early retired.
7. Therefore, as information is used — even more is generated.
8. Because of the selection and compression of information into knowledge and wisdom, some of it is
necessarily lost.

Ex.10. Translate into English

1. Фактори виробництва — це ресурси, необхідні для виробництватоварів або послуг.
2. Класичними факторами виробництва є робоча сила (всі розумові та фізичні здібності людей),
земля (природні багатства), капітал (вже існуючі/вироблені засоби виробництва, а також
фінансовий капітал).
3. Четвертим фактором виробництва вважається підприємливість, яка об'єднує попередні три
фактори.
4. Інформація може бути включена як п’ятий фактор виробництва.
5. Підприємницькі здібності – це особливий вид людського капіталу, який передбачає
використання ініціативи, винахідливості та ризику в організації виробництва.
6. Підприємництво – це діяльність по координації та комбінуванню всіх інших факторів
виробництва з метою створення благ та послуг.
7. Природні ресурси — це все те, що людина бере з природи і за допомогою своєї праці
перетворює на продукт задоволення власних потреб.
8. Земля – це природно-сировинні ресурси, а також повітря, клімат, вода, ґрунти, тобто все те,
що дає природа в розпорядження людини і використовується у виробництві товарів і послуг.
9. Робоча сила є особистим фактором виробництва і головною творчою продуктивною силою
суспільства.
10. Робоча сила - це здатність людини до праці, результатом якої є продукт або благо.
11. Первинними факторами виробництва були земля і праця.
12. Капітал як фактор виробництва - це майно (засоби виробництва), що належать підприємцям
або іншим власникам і використовуються в процесі створення товарів і послуг.
13. Особливістю капіталу є те, що він має бути кимось накопичений, створений.
14. Капітал існує лише у продуктивному використанні, саме тоді, коли його власниками
одержуються доходи від користування та володіння своїм майном.
15. Обмеженнями використання інформації є здатність користувачів аналізувати, зберігати та
відтворювати її.

LANGUAGE SKILLS

Ex.11. Ask questions to which the following sentences may be answers.

1. The choices about an economy’s use of its factors of production, the resources available to it for the
production of goods and services.
2. The value, or satisfaction, that people derive from the goods and services they consume and the
activities they pursue.
3. Labour, capital, enterprise and natural resources.
4. The human effort that can be applied to the production of goods and services.
5. People who are employed or would like to be.
6. A factor of production that has been produced for use in the production of other goods and services.

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7. Office buildings, machinery, and tools.
8. The activities of profit-seeking decision makers who determine which economic activities to undertake
and how they should be implemented.
9. The resources of nature that can be used for the production of goods and services.
10. Information.
11. It means all natural resources and agents, with their sites (locations and extensions in space).
12. Through education and training.
13. In many important aspects.
14. The capacity of users to analyze, store and retrieve information.
15. Through the selection and compression of information into knowledge and wisdom.

Ex.12. Answer the following questions.

1. What are the choices concerning what goods and services to produce?
2. What does the term “utility” mean?
3. What are the factors of production in an economy?
4. What can be applied to the production of goods and services?
5. What does capital represent?
6. What are natural resources?
7. What does the factor of production land comprise?
8. What does economic land exclude?
9. Why is land supply fixed?
10. In what case will labour’s contribution to productive output increase?
11. What forms of labour are there?
12. What does demand for labour depend on?
13. What is the quantity of labour?
14. What forms of wages are there?
15. What are the salient characteristics of information?

Ex.13. From your local paper collect advertisements or articles for each of the factors of
production. Labour should be easy - job vacancy adverts. But the others will be slightly more
difficult.

Ex.14. Make a presentation of the topic “Factors of production”.

WRITING

Ex.15. Write a plan of your summary based on Text A.

Ex.16. Using your plan as a base, write a brief summary (25-30 sentences) of the text.

Ex.17. Write an essay (100 – 150 words) about:

- the importance of factors of production in an economy.

DISCUSSION POINTS

Ex.18. Discuss the following.

1. How many factors of production are there in an economy?
2. Briefly define each factor of production.
3. Why are the factors interdependent? Explain.
4. What is capital?

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5. What is wealth? Give an example.
6. Why is land considered a passive factor of production?
7. How do capital and labour differ from land?
8. How has the workforce changed in Ukraine for the last 25 years?
9. What factors have contributed to those changes?
10. How have those changes affect your life and culture?
11. Why is it important to understand how terms are used in different contexts?

Ex.19.Consider the factors of production that went into the making of one sheet of notebook paper.
Name some of them.
Example: Suppose you go to the supermarket and buy a box of corn flakes. Each of factors of production
went into the making of this cereal. For example, some of the things used in the production and
distribution of the corn flakes are: box-making machinery, fertilizer, a storage warehouse, prairie or
farmland, farm machinery, delivery truck and driver, wholesale middleman, retail grocery store, store
clerk, etc.

Ex.20. Look through product advertisements in magazines, on the internet, in newspapers, or

elsewhere. Choose any two products to investigate.
Cut out the advertisement or draw a picture of each product. Design a chart titled “Factors of Production.”
Do this for each product. List all of the resources (land, labour, capital, producer) utilized to create the
product. Then, label each resource on your list as land, labour, capital, or business (producer / enterprise).

TEXT B: ENTREPRENEURSHIP

Ex.21. Scan the text below and give headlines to each paragraph.
Land, labour, capital, and entrepreneurship: (0) ____________ . Of course, in a literal sense
anything contributing to the productive process is a factor of production. However, economists seek to
classify all inputs into a few broad categories, so standard usage refers to the categories themselves as
factors. (1)____________ Entrepreneurship is a fairly recent addition.
The factor concept is used to construct models illustrating general features of the economic
process without getting caught up in inessential details. These include models purporting to explain
growth, value, choice of production method, income distribution, and social classes. A major conceptual
application is in the theory of production functions. One intuitive basis for the classification of the factors
of production is the manner of payment for their services: rent for land, wages for labour, interest for
capital, and profit for entrepreneurship.
This category sometimes extends over all natural resources. It is intended to represent the
contribution to production of nonhuman resources as found in their original, unimproved form. For the
French physiocrats led by Francois Quesnay in the 1750s and 1760s, land was the only factor yielding a
reliable gain to its owner. In their view, labourers and artisans were powerless and in excess supply, and
hence they earned on average only a subsistence-level income; and in the same way what they produced
outside of agriculture fetched enough to cover only their wages and input costs with no margin for profit.
Only in agriculture, due to soil fertility and other "gifts of nature," could a labourer palpably produce
more than required to cover subsistence and other costs, so only in agriculture could proprietors collect
surplus. (2)____________ . They recommended taxes on land as the only sound way to raise revenue and
land-grabbing as the best means to increase the government's revenue base.
In 1821 David Ricardo, in The Principles of Political Economy and Taxation, stated what came to
be known as the classical view: that rent reflects scarcity of good land. The value of a crop depends on the
labour required to produce it on the worst land under cultivation. This worst land yields no rent—as long
as some of it remains unused—and rent collected on better land is simply its yield in excess of that on the

11
worst land. Ricardo saw rent as coming from differences in land quality (including accessibility) and
scarcity. The classical economists assumed only land—understood as natural resources—could be scarce
in the long term.
Marginalism, as expounded in 1899 by John Bates Clark in The Distribution of Wealth, takes a
different approach. It declares that rent reflects the marginal productivity of land—not, as with Ricardo,
the productivity of good versus marginal land. Marginal productivity is the extra output obtained by
extending a constant amount of labour and capital over an additional unit of land of uniform quality. (3)
____________ . Their theory is based on the possibility of substituting among factors to design
alternative production methods, whereby the optimal production method allocates all the factors to
equalize their marginal productivity with their marginal costs.
Long thought of as a self-sustaining input, land might depreciate just like produced assets do. In
1989 Herman Daly and Jonathan Cobb, in For the Common Good, distinguished between non-renewable
resources that are consumed or depreciate irretrievably, and renewable resources where the rate of natural
renewal is important. One consequence of this work in environmental economics is that natural resource
accounting increasingly resembles capital accounting.
The classical "labour theory of value" was an innovative theory in response to the physiocratic
doctrine that only land could yield surplus. In 1776 Adam Smith, in The Wealth of Nations, observed that
with expansion of production and trade, enterprises were making profits over long periods of time,
although they either had nothing to do with agriculture or else as agricultural enterprises. Classical
economists tried to answer the question: Where does profit come from? (4)____________ . At prevailing
prices, labour can yield a surplus over subsistence costs in many industries.
The question arises of why proprietors, but not labourers, earn profit. Ricardo arrived at one
answer: Technical innovation increases labour productivity. Owners of innovative equipment, until its
general adoption, get the premium from reduced costs. In 1867 Karl Marx in Capital, added that wages
reflect the cost of subsistence, not what labourers can produce, and that profit is the difference between
the two. Even without innovation proprietors would reap surpluses, Marx held, since labourers lack
market power and cannot afford their own equipment.
Why do wages differ for different types of labour? Marx's answer was that higher wages cover
costs, beyond personal subsistence, of training and cultivation of skills, acknowledging that one kind of
"equipment," now known as human capital, was available at least to some labourers.
Marginalist economists noticed the advance of technology, which according to classical and
Marxist views made labour ever more productive, continually throws labourers out of work.
(5)____________ . Referring to equipment as capital, they developed production functions featuring
labour and capital as substitutes for each other. Choice among production techniques involving different
combinations of labour and capital became a major theme in marginalist growth theory.
This most controversial of factors is variously defined as produced equipment; as finance used to
acquire produced equipment; as all finance used to begin and carry on production, including the "wage
fund"; and as the assessed value of the whole productive enterprise, including intangibles such as
"goodwill." In 1960 Piero Sraffa, in Production of Commodities by Means of Commodities, showed that
capital in the sense of produced equipment can fail to behave as expected in marginalist production
functions when an entire economy is modelled. Specifically, equipment adopted to replace labour after
wages rise from a low level, relative to interest on capital, may be abandoned again in favour of labour as
wages rise still higher. This counterintuitive "reswitching" can happen because the equipment used is
itself a product of labour and equipment, and because the ratio of labour to equipment varies for different
products.
Frequently capital is treated as finance, associated with the payment of interest. Yet the
connection with equipment, in spite of Sraffa's demonstration, has never been severed entirely. One still
studies capital depreciation, distinguishing wear-and-tear from obsolescence, and from the present value
of investments in capital. (6) ____________ . Furthermore, acquired skills (as opposed to "know-how,"
an attribute of society rather than individuals) have come to be viewed as analogous to physical

12
equipment, capable of yielding their owners a return. This analogy suggests their current designation as
human capital. Thus capital is a concept still mired in confusion, and care must be taken in its use to be
sure what it means.
Until the twentieth century, this function was assigned to the capitalist and frequently conflated
with capital. In the classical view, profit rather than interest was attributed to ownership of capital. In the
marginalist view, capital earned interest, and profit was a mere residual after all the factors of production
were compensated. In his Principles of Economics, first published in 1890, Alfred Marshall made
extensive references to "organization" and "management," referring to the coordination function of
entrepreneurship but to neither risk-assuming nor innovation. But in 1912 Joseph Schumpeter, in The
Theory of Economic Development, featured the revolutionary role of organizer and innovator and
contrasted it with that of the conservative financier, thus vividly distinguishing the entrepreneur from the
capitalist. The entrepreneur's role in this view is not merely that of manager and risk-taker, but also of
visionary - someone who seeks as much to destroy the old order as to create something new. Since
innovation usually requires destroying old ways of doing things, Schumpeter gave it the name "creative
destruction." Profit is now assigned to entrepreneurship, to innovation. With the rise of "venture
capitalists" and other financiers willing to take on more risk and do more for innovation in the hope for
supernormal returns, the distinction between capitalist and entrepreneur has again become fuzzier.
(7)____________ . Although in business usage stock dividends are distributed profits, in economic
analysis they figure as returns to capital, a kind of interest payment, since they are a return to finance
rather than to entrepreneurship. The fact that stocks are legally equity rather than debt shares is thereby
ignored. Similarly, salaries of corporate executive officers are treated as profit, a return to
entrepreneurship, rather than as wages for labour services.

Ex.22. Read the text. Choose the best sentence A-G to fill each of the gaps 1-7. Do not use any
sentence more than once. There is an example at the beginning.
0 These are four generally recognized factors of production.

A Increasingly, theory has come to treat any investment as a capital investment.

B Before the twentieth century, only three factors making up the "classical triad" were recognized: land,
labour, and capital.
C Now there are entrepreneurial financiers as well as entrepreneurial producers and distributors.
D Marginalists held that any factor of production could be scarce.
E Their answer was that it came from labour.
F This led them to attribute productivity to equipment rather than only to labour.
G Thus the physiocrats explained land rent as coming from surplus produced by the land.

Ex.23. Read the text again and decide whether the following statements are true or false. Correct
the false statements.
1. Entrepreneurship is a fairly ancient addition.
2. A major conceptual application is in the theory of production functions.
3. For the Spanish physiocrats led by Francois Quesnay in the 1750s and 1760s, land was the only factor
yielding a reliable gain to its owner.
4. The classical economists assumed only land—understood as natural resources—could be scarce in the
short term.
5. Marginal productivity is the extra output obtained by extending a constant amount of labour and
capital over an additional unit of land of uniform quality.
6. Classical economists tried to answer the question: Where does profit come from?
7. Technical innovation decreases labour productivity.
8. Choice among production techniques involving different combinations of labour and capital became a
major theme in classical growth theory.

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9. Frequently capital is treated as finance, associated with the payment of interest.
10. In the marginalist view, profit rather than interest was attributed to ownership of capital.

Ex.24. Answer the following questions.

1. What is the factor concept used for?
2. Where could proprietors collect surplus (for the French physiocrats)?
3. What does the value of a crop depend on?
4. What does rent reflect (in the marginalist view)?
5. What question do classical economists tried to answer?
6. What increases labour productivity?
7. What became a major theme in marginalist growth theory?
8. How is capital defined?
9. How is capital treated frequently?
10. What is the entrepreneur's role in The Theory of Economic Development?

TEXT C: FACTORS OF PRODUCTION FOR AN INNOVATION ECONOMY

Ex.25. Before reading
Can you anticipate what an innovation economy is?

Ex.26. Reading
(1) Many years ago, economists from the industrial revolution identified three variables
(productive inputs) for building industries; Land, Labour, and Capital. The rate of output was related to
how these inputs were combined. If any of these factors of production were missing, the other two had
little or no utility for production. The concept of Land, Labour, and Capital is still the foundation of
much of today’s economic thought.

(2) We know that in the knowledge economy, the location of knowledge work is highly mobile –
so “Land” does not have the same significance for making things as it did 100-200 years ago. What about
“Labour“? Knowledge workers analyze situations, manage many variables, and create unique solutions.
They do not really produce identical knowledge pieces like a machine operator or a production worker –
so Labour also means something different than a century ago. The term “Capital” refers to money that
would be needed now to build future structures, buy machines and to pay wages. Today money buys
access to information, education, and knowledge workers. So we see that many old economic principles
may not be as applicable in the new economies.

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 (3) The factors of production for the Innovation Economy are Intellectual Capital (also call
Human Capital), Social Capital, and Creative Capital + Entrepreneurs. (Reference: Jane Jacobs, Robert
Putnam, Richard Florida)
(4) Intellectual Capital Theory suggests that concentrations of educated and motivated people
attract investors to employ them and invest in the communities where they reside. This investment attracts
other intelligent people who in turn attract more investment thereby creating a cycle of economic growth.
(5) The Social Capital Model suggests that people acting in communities can create better
solutions, greater accountability, and more economic growth than management, governments, or
bureaucracy can induce on their own. Examples of Social Capital include Civil Rights Movement,
community watch organizations, Democratic Government, and recently, Social Networking.
(6) The Creative Capital Model suggests that engineers and scientists think more like artists and
musicians than like production workers – their ideas come 24/7/365 – and that an environment of
tolerance, diversity, and openness promotes creative output.
(7) Many people argue that Silicon Valley, in fact, was created and sustained by a perfect storm
of Social Capital, Creative Capital, an Intellectual Capital + Entrepreneurs. Other countries have tried to
duplicate Silicone Valley but most have fallen short – if any of these factors of production are missing,
the other two have limited utility for production of innovation. To demonstrate how these productive
inputs might appear in an innovation economy, consider the following example:
(8) Suppose that we take 5 mechanical engineers and lock them in a room with instructions to
build a better mouse trap, they’ll emerge with a better shingle, a better spring, a better whacker, and a
better trigger – but not necessarily a better mousetrap. Suppose that we now put a dog catcher, an
engineer, a plastics manufacturer, an artist, and the mother of 4 rowdy children together with the same
task. We can be quite certain that innovation will occur. They may actually come up with an excellent
mouse trap.
(9) Innovation Economics will bring the factors of production together in diverse combination
rather than similar combination. In an Innovation Economy, the “secret sauce” for the production of
innovation becomes far more valuable than any single innovation itself. The secret sauce provides a
monopoly on dynamic repeatability rather than a static device. As such, technologies can be open sourced
and innovation crowd sourced across a much wider domain of possible user applications. Such
conditions will change the type of innovations that are favoured to reflect the broad and sweeping social
priorities rather than innovations that are easy to patent, protect, and monopolize.

Task 1. Discuss what Dan Roblescould mean when he said that the rate of output was related to
how the inputs (Land, Labour, and Capital) were combined. (para. 1)
Task 2. Explain how you understand Dan Robles’s ‘knowledge economy’.(para. 2)
Task 3. If something is innovative, is it
a) recently made, built, invented, written, designed etc;
b) more difficult to understand;
c) new, different, and better than those that existed before?

15
 Task 4. How does the author describe Intellectual, Social and Creative Capital? (paras 3-6)
Task 5. What does the author mean by “mouse trap building”? (para. 8) What place does he
focus on in the above text?

BUSINESS COMMUNICATION

In the office

Ex.1. Look at the pictures below and say which of them is

a) a meeting room;
b) a director’s office;
c) a receptionist’s (secretary’s) office.

Ex. 2. Read the words in the box and group them into categories. You can add other suitable words.
answering machine, calculator, calendar, computer, correction pen/fluid, desk tidy, desk lamp, fax
(machine), file, filing tray, filing cabinet, hole punch, indoor plants, keyboard, laser printer, memo sheets,
mouse mat, notepad, notice board, paper clips, (photo)copier, pigeonholes, post-it, printout, rubber (Am.
eraser), scanner, sharpener, stapler, staples, staple remover, stick of glue, (tele)phone, telephone directory,
text marker, in /out tray, wastepaper basket (Am. bin), workstation

office furniture office supplies office equipment others things

filing cabinet paper clips computer printout

swivel chair correction pen calculator wastepaper basket

Ex.3. It so happens that many people spend more time in their office than at home. What things do
you think can be used to decorate or personalise an office without spoiling its professional image?
Discuss it with your partner.

Ex.4. Describe a room where a secretary/a receptionist works, their workstation and office
equipment they usually use.

Ex.5. Rosa works as a chief executive secretary in a large industrial company.

a) Which of the following statements do you think are true of her in her job?
1. She works at a computer most of the time, where she writes letters and
reports.
2. She does quite a lot of general paperwork, e.g. filing reports, answering
letters and others.
3. She makes a lot of phone calls.
4. She sends faxes occasionally.
5. She often shows people around the office.
6. Every time she takes part in the negotiations as an interpreter.
7. She arranges meetings for her boss and other managers in the company.
8. She attends all the conferences or meetings in the company.
b) Describe Rosa’s job and her everyday duties.

16
Ex.6. Read the following two texts about office equipment.
 Photocopying machine or (photo) copier.
Walk into almost any business office, and you'll probably find a photocopier ("copier") with a line of
people waiting to use it. For most businesses, small or large, the copier has become standard equipment,
much like having a desk to work at and a chair to sit on. It’s pretty amazing to think that, in mere seconds,
you can produce an exact replica of what’s on a sheet of paper!

The procedure of producing a copy is very simple.

1. Make sure the photocopier is plugged into a power source.
2. Turn the photocopier on.
3. Open the copier lid.
4. Place the document to be photocopied face-down on the glass.
5. Select the options you want (number of pages, enlargements, lighter/darker).
6. Press the button “Start”.

 Fax machine or fax

Even though traditional fax machine is fast being replaced by e-mail and Internet fax services, this
workplace workhorse is still used for transmitting information. They are easy to use and resemble dialing
a telephone. Here are some basic instructions for sending a fax.

1. Make sure the fax machine is plugged in, powered and connected to a working phone jack. Turn on
the fax machine.
2. Fill out a piece of paper called a coversheet with
the information about the recipient’s name, his fax
number, your phone number, a short message intended for the recipient, number of pages (including
coversheet).
3. Lay the documents face-up in the fax machine feeder tray with the coversheet on top.
4. Dial the recipient’s fax number.
5. Press the ‘fax’ or ‘send’ button, depending on the particular fax machine model.
As soon as all of the pages have been scanned into the memory of the fax machine, you’ll hear a series of
signals which mean establishing a communication link. Wait for a few minutes as the fax is sent and then
see a short confirmation report.

Ex.7. Explain to your new colleague how to use

 a photocopier;
 a fax machine;
 a scanner;
 a printer.
You may need the following phrases and linking words:
First, you must …. Then, you have to … (it’s necessary).
You needn’t /You don’t have to … (it’s not necessary).
If you press this key, the computer prints out the reading.
If you press this key by mistake, you’ll lose all the data.

Work in pairs
Ex.8. Read these mini-dialogues and role-play them.
1.
O. Bruno, can you send us your pricelist by fax?

17
B. Sure. I’ll fax you right now. What’s your fax number?
O. 38 for Ukraine, 044 for Kyiv, then 455 77 07.
B. OK. I’ve got that.

2.
B. Have you got my fax, Oleg? Is everything legible?
O. You’re not going to believe this, but the paper got stuck and the machine jammed.
B. No problem. I’ll send it through again.

3.
S. Will you be using the photocopier for long, Sue?
D. No. Why?
S. OK. I’ll wait then. I need to make a copy of the report for our meeting.

4.
S. Will you be using the photocopier for long, Danielle?
D. Oh, yes. I’ve got a pile of papers to copy.
S. Sorry, could you stop for a minute and let me make one copy, please? Our boss needs it urgently.

Ex.9. Complete the dialogues.

1.
A. __________________________________________?
B. Sure. I’ll fax you right now. What’s your fax number?
A. __________________________________________
B. OK. I’ve got that.

2.
A. Have you got my fax, Berta? Is everything legible?
B. __________________________________________
A. No problem. I’ll send it through again.

3.
A. __________________________________________?
B. No. Why?
A. __________________________________________

Ex.10. Now make dialogues of your own and role-play them with your partner.

GRAMMAR

THE PRESENT PERFECT TENSE

Ex.1. Read and translate the sentences. Write out the verbs in the Present Perfect.
1. Alex has always wanted to go to Tibet, but he has never had such a chance.
2. Put your wallet away, I’ve already paid for everything.
3. Gabi has just told me that she is getting married.
4. Where did you buy that round Persian rug you’ve got in the hall?
5. You’ve missed her – if you hurry, you’ll catch her in the street.
6. I often see this guy but I have never spoken to him.
7. I have a gut feeling that he has failed the interview.

18
8. Dick has been out of work for about a year, and he has been desperate all this time.
9. Calm down, Liz. John has just phoned! He has got the job!
- Has he? Oh, I’m so glad for him. It has never been easy to find a job, particularly a good one.
10.- You’re right. There has been an increase in unemployment in our country recently.
- Moreover, the situation is getting worse and worse these days.

Ex.2. The Present Perfect: full and short forms.

Task A: Change the full Present Perfect forms to contractions:
1. I have forgotten her address. – I’ve forgotten her address.
2. I have not noticed anything so far. – I haven’t noticed anything so far.
3. You have said that. – _____________________________________________.
4. It (The train) has already arrived. – ___________________________________.
5. It has not rained this month. – _______________________________________.
6. Dr. Adamson is not here. He has just left. – ____________________________.
7. Look! She has caught a big fish! – ___________________________________.
8. Patricia has not been at home for three years. – _________________________.
9. We have never enjoyed Christmas as much as this one. – _________________.
10. They have been here before. – _______________________________________.
Task B: Are these contractions has or is?
1. She’s arrived. → She has arrived.
2. She’s tired. → She is tired.
3. He’s worried.
4. He’s eaten.
5. She’s outgrown all her school clothes.
6. The dog’s escaped.
7. The cat’s hungry.
8. She’s ill.
9. She’s had a cold.
10. She’s never met his ex-wife.

Ex.3. Write the Past Participle of the following verbs.

1. speak - spoken 11. meet
2. book - booked 12. sell
3. carry 13. buy
4. eat 14. fax
5. drink 15. see
6. find 16. leave
7. found 17. taste
8. lie 18. prefer
9. lay 19. control
10. know 20. write

Ex.4. Read the poem. Pay attention to the way of making questions.
Have you ever seen the beaches of Mexico?
Have you ever walked the streets of San Juan?
Have you ever been to Haiti?
Have you ever been to Spain?
Have you ever walked barefoot in a heavy rain?

19
 Have you ever been in trouble?
Have you ever been in pain?
Have you ever been in love?
Would you do it all again?

Well, I’ve never seen the beaches of Mexico.

I’ve never walked the streets of San Juan.
I’ve never been to Haiti.
I’ve never been to Spain.
I’ve never walked barefoot in a heavy rain.

But I’ve sure been in trouble,

I’ve sure been in pain,
I’ve sure been in love,
I’d do it all again.

Ex.5. Ask general questions using the following word combinations.

Model:
change a wheel on a car → Have you ever changed a wheel on a car?
take money out of a cash machine → Have you taken money out of a cash machine recently?
1. waste money on something you’ve never used
2. lose a credit card or your wallet
3. lend money to someone who didn’t pay you back
4. borrow money from your friends or someone in your family
5. buy or sell something on the Internet
6. have your own account with a bank
7. win a competition
8. have your photograph in the newspaper
9. break something valuable
10. forget your front door key

Ex.6. Put the verbs in brackets into the Present Perfect to make up questions. Complete the
answers providing additional information.
1. You ever (eat) at Maxim’s restaurant? – Yes, I _______. → Have you ever eaten at Maxim’s
restaurant? – Yes, I have. They have a wonderful cook there!
2. Your sister (pass) the entrance exams? – Yes, she ________ .
3. You (hear) from Nellie lately? – No, I _________.
4. You (see) my gloves anywhere? – No, I’m afraid I ________ .
5. He (find) his watch? - Yes, he _________ .
6. You (pay) the electricity bill yet? – No, I _________.
7. How long you (know) Derek? – I ____________ him for about five years.
8. You (spend) all your money? – No, I ___________ only half of it.
9. And what about Betty? - You wouldn’t believe! She _______ (spend) everything, to a penny.
10.You _______ (see) Charles lately? – No, I ________ him since Christmas.

Ex.7. Respond to the following, using the Present Perfect.

1. Why don’t you join me and have lunch?
– I’ve already had lunch. I’m not hungry.
2. This is a very good dictionary. George, you may need it in your studies. Why don’t we buy it? –
______________.
3. Why don’t you apply for this job? You may get it. - _______________.

20
4. Why don’t you speak to the boss? ____________________.
5. Why don’t you phone and explain everything to him? ____________.
6. Why don’t you try on these shoes? _______________.
7. Why don’t you say ‘Happy birthday’ to Sally? She used to be your friend. ____.
8. Why don’t we invite her to our party? _____________________.
9. If you need some help, why don’t you ask me or somebody else? ___________.
10. Why don’t we go and see this film? – Oh no, _______________ (twice).

Ex.8. Choose the correct word (adverb of time) in italics. In some sentences both variants are
possible. Translate the sentences.
1. John Grisham is a well-known American writer. He has written about twenty novels still/so far.
2. They have already/still employed a new supervisor.
3. Jeff is very sad. He has ever/just failed the exam.
4. We’ve just/already gone through the customs.
5. Have you never/ever tasted paella? – Yes, I have. I tasted it when I was on holiday in Spain.
6. You’re just in time. The concert hasn’t begun still/yet.
7. I have never/just seen this film before.
8. Have you seen any good films since/ lately?
9. The secretary has typed ten letters this morning yet/so far.
10. Our neighbours have moved to another town recently/so far.

Ex.9. Fill in for or since.

1. ______ 2010 – since 2010
2. ______ two hours
3. ______ I was five.
4. ______ ages
5. ______ they moved to Italy
6. ______ six months
7. ______ we were at college
8. ______ half an hour.
9. ______ last spring
10. ______ a long time

Ex.10. Complete the sentences, choosing for or since and putting the verbs into the correct form.
The first two sentences have been done for you.
1. Claudia __________ (not, learn) very much ______ the term began. She needs to study harder. –
Claudia has not learnt very much since the term began. She needs to study harder.
2. The Browns __________ (live) here ______ a long time. They __________ (live) here ______ 1990.
– The Browns have lived here for a long time. They have lived here since 1990.
3. I _________ (not, see) Molly ______ she left the office.
4. He _________ (not, phone) us ______ Sunday.
5. Ann and Andy __________ (move) three times ______ they got married.
6. They ________ (be married) ______ last year.
7. We __________ (not, be) to the cinema ______ ages.
8. Jenny ________ (be ill) ______ last week.
9. I _________ (not, talk) to her ______ days.
10. It _________ (not, rain) ______ the end of July.
11. Sylvia ________ (be) with the publishing company ______ 1995.
12. You must have bought your Porsche quite recently. It looks great! – Nothing of the kind. I
__________ (have) it ______ three years.

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13. How many invitations _____ you__________ (writе) ______ morning?
14. How long _____ you __________ (know) Paul? – Uh, ______ many years.
15. We __________ (be) friends ______ our schooldays.

Ex.11. Fill in the gaps with have/has gone to, have/has been to or have/has been in.
1. Alice isn’t here at the moment. She ______ just ______ the trading centre, and I don’t think she’ll be
back very soon.
2. Sheila __________ the USA twice.
3. How long ______ they ______ Stoke-on-Trent?
4. ______ you ever ______ London?
5. Mr. Smith __________ New Orleans for nearly four years.
6. Phil, are you alone in the house? Where is everybody? – Mum __________ the cinema with Julia. As
for Dad, he _________ the golf club.
7. Are you going to the sports centre? – No, I ______ already ______ there.
8. Hi, Jim! Have you seen Mark? – Yes. He ______ just ______ the newsagent’s to get some envelopes.
9. I hear you are going to Bern? – That’s right. I have always wanted to go there. I ______ never
______ Switzerland.
10. My sister Amy lives in Bern with her family. They __________ Switzerland for three years. I can
ask her to show you around the city if you want.

Ex.12. Change the sentences using the construction It’s/This is the first/second/third/fourth time I/he
+ the Present Perfect.
Model:
Bill is a bit nervous. He has never driven a car before. (the first time) →
Bill is a bit nervous. It’s the first time he has driven a car.

1. Don’t be so critical! Mathew has never played baseball before. (the first time)
2. I have never ridden on a camel before. It is so unusual!
3. I have never eaten Indonesian food before.
4. You say the Four Seasons? That must be very expensive. – It is expensive, but the hotel is very
comfortable and the service is impeccable. I have never stayed in such a luxury hotel before.
5. The children are very excited. They have never been on a plane before.
6. We have never raised and seriously discussed such a question.
7. We have complained to the manager twice.
8. Ron, how’s that? You’ve lost your keys again. (the second time this month.)
9. Oh, dear! You’ve damaged your car again! (the third time)
10. Robert has phoned her three times this evening. (the fourth time)

Ex.13. Read the sentences below and express the same idea in a different way.
Model:
I have never seen such a good comedy. → It/This is the best comedy I have ever seen.
1. We have never had such a wonderful New Year party before!
2. I have never visited such an old castle before.
3. How do you like his new novel? - Honestly, I have never read such a boring book!
4. I have never eaten at such a nice restaurant. The meal is delicious here!
5. The coffee is disgusting! I have never tasted such awful coffee.
6. Cathy is so patient and tolerant of other people. – You’re right. I have never met such a patient
person.
7. Do you enjoy your new job? – Oh, yes. I have never had such a good job.

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8. I’m glad Steve agreed to work with us. I have never met anyone more reliable and responsible than he
is.
9. This painting of yours is really fantastic! I have never seen anything better.
10. Your new song is brilliant! I have never heard anything better!

Ex.14. Read the sentences in the box, and then match them with their description. Explain your
choice.
Model:
 My elder brother has been in Stockholm since 2006. – (a) It started in the past
and continues up to the present. My elder brother lives and works there now.
 Look! They have finally painted the house! – (d) The result is visible. You can see it now.

1. Rachel is the most intelligent person I’ve ever a - action which started in the past and continues
met. up to the present;
2. She has been the manager of your firm since last
year, hasn’t she? b - action which happened in an unfinished time
3. I’ve received five faxes from them today. period (today, this morning, and it is still
4. Have you heard the news? Mark has bought a morning.)
horse. - I know. He is crazy about horses and
horse-riding. c - action which happened at an unstated time in the
5. Hurray! Our football team has won! past (the exact time is not mentioned, unknown
6. I’ve known Paul for a few months, but I’ve met or unimportant. What is important is only the
his sister only once. action / the fact itself);
7. This is the nicest restaurant I have ever been to!
8. Sorry, Liz, I can’t go now. I’ve just washed my d - action which happened in the past and the result
hair. can be seen now;
9. Aunt Sonia has bought a house.
10.Be careful where you walk. Samantha’s broken e - giving recent news or fresh information;
a vase, and Johnny’s already cut himself.
11. They have developed a new brand of f - something that describes personal experience
toothpaste. with superlatives or ordinals.
12. Amazing news! Our country has won the right
to host the Games.
13. A cup of coffee, Vic? – No, thank you. I’ve
drunk two cups this morning.
14. Why aren’t you going home, Tommy? It’s
going to rain. – I can’t. I’ve lost the key.
15. Ow! I’ve burnt myself!

Ex.15. Correct the mistakes if there are any.

1. Let’s wait a little. He hasn’t phone yet.
2. Have you heard the news? Tom and Lucy got married.
3. Is Jill in the office? - I don’t know. I haven’t seen her all day.
4. I am at university since nine o’clock.
5. It’s the first time he have given us an interview.
6. Sorry, Colin, I haven’t still booked the flight.
7. Karen has been to the baker’s. She’ll be home very soon.
8. Have you finished the project? – Yes, we have. We’ve finished it two days ago.
9. Sharon has been on the phone for ages.

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10. John hasn’t answered my letter not yet.
11. My husband doesn’t sleep very well recently.
12. He has been one of the leading fashion designers from the early 1980s.
13. I haven’t saw Martha for months. How’s she?
14. This is the third time Alan goes to Milan this year.
15. Really? He is lucky. By the way, did you ever go to Italy?

Ex. 16. Translate the dialogue into English.

- Энн, я не бачила тебе вже сто років. Де ти пропадала весь цей час?
- Я була в довгостроковому (тривалому) відрядженні в Торонто (to be on a business trip). Я щойно
приїхала звідти.
- Торонто? Я була там двічі. Гарне місто.
- Розповідай, де ти живеш, працюєш! Як життя?
- Працюю я в канадській фірмі у відділі маркетингу і реклами. Ось уже рік, як я там працюю.
Нещодавно я вийшла заміж.
- Дійсно? А хто він?
- Ти його не знаєш. Це Гері Кларк з нашої фірми.
- Він іноземець?
- Так, мій чоловік з Канади. Але мешкає і працює тут вже кілька років. Досить гарно спілкується
українською.
- Ви мешкаєте з батьками чи окремо (on your own)?
- У нас невелика квартира неподалік від центру міста. А як ти?

THE PRESENT PERFECT CONTINUOUS TENSE

Ex.17. Read and translate the sentences. Write out the verbs in the Present Perfect Continuous.
1. Mr. Grace has been teaching at the University of Leeds for ten years.
2. The professor has been explaining this math problem for an hour and the students still can’t
understand it.
3. In 1956, the first fully automatic mobile phone system was developed by Ericson and was
commercially released in Sweden. Since that time people have been using mobile phones.
4. They have been developing two new software programmes since the beginning of the year.
5. What have you been doing since I last saw you?
6. We have been advertising these products for six months.
7. Sorry, I haven’t finished typing. I’ve been dealing with customers all day.
8. The streets are all wet. It has been raining all night.
9. Tom and Mary have been going out together since Christmas.
10. Andrea and Laura haven’t been working together for long.
11. What’s the matter, Hannah? Your eyes are red. You’ve been crying, haven’t you? – No, I’m fine. I’ve
just been watching a sad film, that’s all.

Ex.18. Write and read the he/she/it forms. Make other necessary changes.
1. I’ve been phoning Maggie all day, but there’s never a reply. – He __________.
2. I’ve been learning Chinese for three years, but I still can’t speak. – My friend
_______________________________________________________________.
3. You have been coming back home late every day for the last month. – Mathew
_______________________________________________________________.
4. You know that I have been working overtime lately. – You know that he _________________.
5. Philip’s parents have been waiting all week for the news from their son. – Philip’s mother
__________________________________________________.

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6. They have been building this bridge for ages. – This construction company
______________________________________.
7. I’ve been sorting out the mess on my desk all day. – Bill
______________________________________________________.
8. I’m tired. I have been ironing all day. – Natalie _________________________.
9. I have you been using this coffee machine for three years. – She ________________.
10. I’ve been packing our things all morning. – Monica______________________.

Ex.19. Complete the sentences, putting the verbs in brackets into the Present Perfect Continuous.
1. Tracy (talk) _______________ on the phone for about twenty minutes.
2. They (interview) _______________ the candidates for over two hours.
3. George says that their company is likely to change the management structure. They (plan)
_______________ this for a long time.
4. Hi, Jack. Where have you been? We (look for) _______________ you all morning.
5. You (wear) _______________ this jacket for years. It’s old. I think we must buy a new one for you.
6. I (live) _______________ here since last year, but my neighbour Bill (live) _______________ in the
house all his life.
7. Paul, you (smoke) _______________ too much recently. You should cut down on smoking.
8. Everything is white outside. It (snow) _______________ all night.
9. It smells delicious in here. _______________ you (bake) something?
10. Sorry, I’m a bit late. – That’s all right. I (not, wait) _______________ long.

Ex.20. Ask questions using the question words in brackets.

1. We have been working on this project for two years. (How long?)
2. Mike has been working with us since January. (Since when?)
3. He is an experienced specialist. But you know, he has been making too many
mistakes lately. (Who?)
4. I hear Sharon is looking for a new job. - Yes, she is. She has been looking
for it for about two or three months. (What?)
5. It seems strange but she has been avoiding me over the last few days. (Why?)

Ex.21. In pairs, ask and answer questions.

Model:
Valerie, run the hotel, since last year.
- Has Valerie been running the hotel since Mr. Norris retired?
- How long has Valerie been running the hotel? - She has been running it since last year.
2. People, use the telephone, 1876. – ____________________________________
3. People, watch television, the late 1930s. – ______________________________
4. People, print newspapers, the early 1600s. – ____________________________
5. People in Japan, travel by “bullet trains”, 1964. – ________________________

Ex.22. Make up sentences using the Present Perfect Continuous to indicate the recent activities of
the person or temporary effects. You can use the prompts in the list below.
To eat pasta with ketchup, to wash the car; to play in the mud; to write for three hours/all morning; to
run; to lie in the sun for too long

1. Look! Little Stella has lipstick and mascara all over her face.
- She has been playing with her mother’s cosmetics.
2. You are wet through. What have you been doing? – I ___________________ .
3. Look! Her skin is sunburned. – She ________________.

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 4. You have ketchup on your face. - __________________.
5. My hand is tired. - _______________.
6. The little boy is dirty from head to foot. - ____________.

Ex.23. Read these sentences and arrange them into two columns according to what they describe or
indicate:
a) the duration of an action which started in the past and continues up to the present;
b) the recent activities of the person or temporary effects.
1. Mum, you’ve been baking something. I can smell it.
2. The lift hasn’t been working since morning.
3. I’ve been renting this flat for two years.
4. Sharon and Kenny look angry. Maybe they’ve been arguing.
5. I’m out of breath. I’ve been running all the way here.
6. How long have you been going out together?
7. Your eyes are red. Have you been crying? – No, I’ve been cutting onions.
8. We’ve been looking for a flat for ages.
9. It’s very late. Why aren’t you in bed? – I can’t sleep. Our neighbour’s dog has been barking for the
last two hours.
10. You two look so exhausted. What have you been doing? - We’ve been sightseeing in the town.
11. We’ve been walking all afternoon. My feet are killing me.

Ex.24. Correct the mistakes if there are any.

1. They are been travelling for two weeks.
2. I’ve thinking about you all week.
3. I can’t say exactly how long I have been knowing Simon.
4. She have been making phone calls all morning.
5. He has been being ill for a couple of weeks.
6. It has been raining all day. I wonder when it will stop.
7. They have been hearing to music for two hours.
8. Mr. Robinson is working in the same place for over thirty years, and he is not planning to retire.
9. Do you have a driving license? – Yes. I have been having it for four years now.
10. I’m not surprised Katie has failed her exam. She has been not working hard recently.
11. You’re so red! How long were you sunbathing? All morning? – I haven’t been sunbathing. I’ve been
reading in the sun.

Ex.25. Translate into English.

1. Пробачте, що запізнився. Потрапив у затор (be stuck in a traffic jam/heavy traffic). Ви давно
чекаєте? – Ні, всього хвилин десять.
2. Я увесь ранок копіюю ці папери, і ще не закінчила.
3. Марк стомився. Він увесь ранок фарбував ворота в гаражі.
4. Ти цілий ранок намагаєшся відремонтувати (fix) свій мотоцикл.
5. Уже півроку, як Том і Мері будують цей будинок.
6. Ми з Білом друзі. Ми знаємо один одного років десять.
7. Шерон, я просто з ніг валюсь (be ready to drop). Ми весь день з тобою ходимо магазинами, але
так нічого й не купили.
8. Люди літають літаками з 1803 року.
9. Джесіка, у тебе очі червоні. Ти плакала?
10. Ти наскрізь змок (be wet through). Йшов без парасольки?

THE PRESENT CONTINUOUS versus THE PRESENT PERFECT CONTINUOUS

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Ex.26. Read and compare the sentences:
Laura, the baby is crying. - She has been crying for almost ten minutes. I can’t do anything.
Complete the situations in 1-4 like in the sentences above and explain the difference between them.
1. It’s raining. – Indeed, it ___________________.
2. He is sleeping. - But he _______________.
3. Who are you waiting for? - The designer. I _________________.
4. Sorry, I can’t help you with your homework. I am revising for my exam.
________________________.

THE PRESENT PERFECT versus THE PRESENT PERFECT CONTNUOUS

Ex.27. Put the verbs in brackets into the Present Perfect or the Present Perfect Continuous.
Model: I’ve checked the calculations. (the focus on the completion) →
I’ve been checking the calculations since/all morning. (the focus on the activities)

1. I (play) ___________ golf four times this week.

2. Ralph (repair) ___________ the washing machine since morning.
3. I feel so exhausted and sleepy. I (work) ___________ on my assignment almost all night.
4. - Stacy says she (not finish) ___________ reading the book yet.
- But she (read) ___________ it for about a month.
5. Vitaliy and Vladimir Klitschko, the world heavyweight boxing champions, (win) ___________ a lot
of gold medals.
6. Everything is white. It (snow) ___________ all night.
7. Betsy is upset because she just (hear) ___________ some bad news.
8. It smells of paint. Dad (paint) ___________ the table.
9. Carol and her family (be) ___________ in Sweden for three years. They (live) ___________ there
since 2009.
10. No wonder that Samantha hasn’t done any work. She (talk) ___________ on the phone all morning.

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